As IMF warns warns of a meltdown, U.S. may be moving too slowly

Posted Oct 12th 2008 10:40AM by Douglas McIntyre
Filed under: Federal Reserve, Financial Crisis

The International Monetary Fund said that the world's banking system is on the verge of a "meltdown" and that the problem had to be addressed immediately.

The U.S. Treasury has not made it clear which banks it may invest in to supply capital, how much that may be, and exactly when it will happen. It has also said the the buying-in of toxic assets may take several months. In other words, the government is moving fairly slowly and with some caution.

The American reaction may simply come too late. The U.K. has already begun the process of putting money into its largest banks. Whether or not it will work is a matter of conjecture. But, the British are not going to dawdle. Time is too short.

If the Treasury Department and the Fed do not make some very significant and specific description of their plans before the markets open Monday, they may see the largest daily drop the market has ever seen.

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: Fed, IMF, inthenews, Treasury

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Reader Comments (Page 1 of 1)

10-12-2008 @ 3:11PM

william lindblad said...

Doug, they said basically the same thing - months ago. There are a lot of people, myself included, that have been saying that this is coming for over two years.
Out of all the leadership only Trichet and the Chinese believed it.
C'est la vie - CYA
(Trichet was in no position to do much but he did keep rates up)